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Arbeitspapiere zur EU-Entwicklungspolitik

Working papers on EU-Development Policy

Documents de travail sur la politique du développement de l’UE


Part II:

Deutscher Bundestag

13th parliamentary term
Document 13/8628


of the Federal Government

to the joint tabled interpellation of the Members of Parliament
Reinhold Robbe, Adelheid Tröscher, Brigitte Adler,
other Members of Parliament and the SPD-Parliamentary Group

– Document 13/7882 –

Annette Brinkmann

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Government policy on the Conventions of Lomé

The Lomé IV Convention on cooperation between 70 ACP States (Africa, the Caribbean and Pacific) and the EU and its Member States, which forms the basis for granting development assistance and trade preferences, will run out at the beginning of the year 2000. The Member States of the European Union today are facing the question of whether to continue or modify the Lomé Convention, a tried and tested instrument of European development cooperation. In November 1996, the EU Commission responsible for these matters submitted a "Green Paper" with the aim of evaluating the present ACP process; the aim was not to present empirically-verifiable data about the successes and failures of the ACP policy which has been in force since 1957. The European Commission will submit a negotiation mandate this year which will define the future relationship between the EU and the developing world.

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I. Results of the present Lomé-policy

1. What have been the objectives of the Federal Government in concluding the present Lomé Conventions?

The Lomé Conventions are an expression of the special relationship which developed historically between Member States of the European Union and the present ACP States and which were initially taken into account under EC Treaty, Article 131. Now that the ACP States have become independent, this relationship is regulated by international treaties, i.e. the Lomé Conventions and its predecessor agreements. This explains the special orientation of the EU in matters of development policy and in regulations of trade policy vis-a-vis the ACP States, as opposed to other developing countries.

In the light of this historical development, the Federal Government considers the Lomé Convention a model for defining the relationship between the developed and the developing world in respect of a more equitable and more balanced world economic order, as expressed in Article 1 of the Lomé IV Convention. The aim of the Convention is to promote autonomous economic, social and cultural development of the ACP countries, based on their own decisions and programmes. Equality of the parties involved and mutual respect of sovereignty and freedom in decision-making therefore constitute the fundamental principles of cooperation (Article 2).

The objectives of the Lomé Conventions are continuously being developed and adapted to the changing conditions of the world economy. The Lomé III Convention focused on rural development as a means of meeting basic needs and on cooperation in fishing and sea transportation, while Lomé IV addressed the question of food security and self-sufficiency in foods. These objectives are met by providing financial aid in the form of project-related grants and by further liberalizing imports on the part of the EU as a means of facilitating integration into larger markets.

When the Lomé IV Convention was amended as part of the midterm review procedure, it was possible, owing to the initiative of the Federal Government among others, to incorporate respect of human rights and the principles of the rule of law and democracy as essential elements of the Convention and to make them binding principles of cooperation (cf. amended version Article 5 of the Lomé Convention).

2. How does the Federal Government view the results of the present Lomé Conventions in respect of

  1. the development-policy objectives of the European Union,

  2. its own objectives in development policy and

  3. sustainable development in developing countries?

a) In the light of defined objectives, the results of the present Lomé Conventions must be viewed separately. The Federal Government agrees in essence with the evaluations of the Commission in its Green Paper (cf. Green Paper on relations between the European Union and the ACP Countries on the eve of the 21st Century, Doc. ACP-CE 2183/96, Preface and Chapter II B). Financial aid from the Community has generally had a positive effect on ACP countries. Unfavourable institutional and economic basic conditions in the ACP countries have, however, diminished the success of support measures in many instances.

b) The Federal Government is involved in the drawing-up and implementation of the development-policy objectives of the EU; they largely correspond to the development-policy objectives of the Federal Government.

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c) Sustainable development is the guiding concept which is increasingly used as a point of orientation for both the development-policy objectives of the EU and the national objectives. This guiding concept defines development cooperation as a means of linking ecology, economy and social security inseparably to each other. Evaluations have shown that inadequate coherence of EU-policies and unfavourable institutional and economic basic conditions in the developing countries, in particular, are frequently diminishing the effect of support measures aimed at sustainable development. The EU therefore incorporated the precept of coherence into the amended EC-Treaty of 1993 (cf. Article 130 EC-Treaty). It should place particular emphasis on improved general conditions in its relations to the ACP States.

3. How was coordination handled under the present Lomé Conventions between the national Governments concerned of the EU on the one hand, the European Parliament and the EU Commission on the other and the ACP States of the South?

For negotations with the ACP States so far, the European Commission drew up a draft negotiation mandate which was discussed by Member States in the "ACP"-Council Group and was adopted by the Council at the end of consultations. Based on the mandate, negotiations with the ACP States took place at ambassadorial level on the part of the Commission and at ministerial level on the part of the Presidency; the mandate was extended and complemented when required.

The draft mandate was additionally submitted to the European Parliament (EP) for an official statement. The EP was similarly informed about the progress of negotiations by both the Commission and the Presidency. When negotiations have come to a close, consent of the EP is required for the final conclusion of the Convention in line with Article 238 in conjunction with Article 228 Para. 2, Sub-para. 2 and Para. 3, Sub-para. 2 of the EC-Treaty.

During the duration of the Convention, coordination of questions of implementing the Convention is handled by the joint committees (with an equal number of representatives from both sides). The most important bodies in this context are the ACP-EC Committee of Ambassadors, which convenes at least twice per year, and the ACP-EC Council of Ministers which convenes annually. The position of the Community, which is represented by the Presidency and the Commission, is defined in the Council Groups concerned (esp. the "ACP"-Council Group and the Committee of Permanent Representatives) prior to the meetings.

4. What criteria determined the granting of Lomé-funds in the past and to what extent was the use of funds tied to compliance with certain criteria on the part of the recipient countries?

Granting of Lomé-funds is in principle based on demographic figures and the Gross National Product of the recipient countries. The use of funds allocated on this basis is agreed between the European Commission and the individual ACP State in national or regional framework programmes for the duration of the European Development Fund (EDF) concerned. Under the Lomé IV Convention amended in 1995, it was additionally agreed to make funds available in stages, i.e. the second "tranche" (30 % of the total sum) is to be paid when results of the first "tranche" (70%) are available. Since Lomé IV, EDF-funds for structural adjustment measures are allocated only if the respective conditions for a reform programme (always with the Bretton-Woods-institutions) are complied with.

As far as the future form of EU-ACP cooperation is concerned, the Federal Government intends to put greater emphasis on development-policy criteria for the allocation of funds, for example the will for self-help, efforts on the recipients´ part and their willingness to introduce reforms.

5. When was payment of allocated funds suspended for a time or cancelled altogether under the Lomé Convention and what had been the reason for it?

Since 1976 development cooperation of the EU has been suspended (temporarily or completely) with the following states:

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Equatorial Guinea

since 1992


April 1995 to July 1995


since 1992


1976 to 1979

The Gambia

since 1994


1996 to 1997


since 1995


since 1990

Democratic Republic of Congo (Zaire)

since 1992


May 1992 to July 1993


since 1990


since 1991

Crucial criteria for the suspension of EU development cooperation consisted in violations of fundamental democratic principles and human rights in addition to civil wars, which made measures by the EU more difficult or impossible.

6. How did the Lomé Convention affect

  1. trade

  2. investment flows

  3. transfer of capital between the Lomé-States and the EU?

    (to be listed in tabular form)

a) EU-trade with the ACP States has developed under the Lomé III and IV Conventions as follows:

Total balance of trade – in billion ECU







EU-imports from ACP States







EU-exports to ACP States







(source: EUROSTAT, "Statistics in brief, Foreign Trade 1997", Vol. 2 and „Foreign Trade 1996", Vol. 9, EU-ACP and Green Paper of the Commission, Doc. ACP-CE 2183/96, p. 97)

b) No tables about flows of investment between the EU and the ACP States are available. The World Bank identifies the following investment flows (foreign direct investment, net) to Sub-saharan Africa in its publication "Global Development Finance, Vol. 2, 1997":

in million US $



c) The flow of capital from the EU to the ACP States has developed as follows under the Lomé III and IV Conventions:

Net flow of capital – in million US $ – at current prices










Public development aid

EU-Member States

2,869 4,289 5,184 5,906 5,951 7,387 6,555 7,081 6,449


657 854 915 1,462 1,458 1,655 1,713 2,432 1,671

total pub. develop. aid EU

3,526 5,143 6,099 7,368 7,409 9,042 8,268 9,513 8,120

Other public payments

EU-Member States

606 843 1,863 1,252 1,290 1,352 789 743 314


43 51 40 –2 23 45 44 188 –48

total other pub. paymt. EU

649 894 1,903 1,250 1,313 1,397 833 931 266

Flow of private capital (net)
"–" from the EU










Total flow of capital

EU-Member States




















EU in total










(source: Commission Green Paper on the relations between the European Union and ACP States on the eve of the 21st century, doc. ACP-CE 2183/96, p. 92)

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7. How has the volume of allocated funds from the EU to the ACP States developed since the First Lomé Convention (quantitative description)?

The following graph describes the development in volumetric terms, starting with the 4th EDF which was set up within the framework of the Lomé I Convention:

total volume

German share


in bill. ECU

in %

in bill. ECU

4th EDF




5th EDF




6th EDF




7th EDF




8th EDF

(of which 12.840 new funds)



(excluding loans from the European Investment Bank, EIB)

8. In which of the Lomé member countries has the EU, or the Federal Government, protested against serious abuses of human rights or democratic deficits in the last ten years?


The Federal Government and the EU protested against the violation of human rights or abuses of fundamental democratic principles in the following countries: Angola, Burundi, Cameroon, Chad, Congo, Democratic Republic of Congo (Zaire), Equatorial Guinea, Eritrea, Ethiopia, Gabon, Kenya, Liberia, Malawi, Mali, Mozambique, Niger, Nigeria, Rwanda, Sierra Leone, Somalia, Sudan, Tanzania, The Gambia,Togo and Uganda. Violations of human rights frequently occurred directly in connection with military coups and civil wars in these countries.

Before the transformation process in 1994, South Africa, too, was the object of repeated protests on the part of the Federal Government and the EU against the Apartheid system of the day and against violations of human rights.


The Federal Government and the EU protested several times against violations of human rights or abuses of fundamental democratic principles in Haiti. After the end of the Duvalier dictatorship in February 1986, massacres, politically-motivated killings, torture and assassinations occurred repeatedly under various military dictatorships. Only when the new President Préval came to power did the situation improve, though not yet satisfactorily.


The EU took diplomatic steps in April 1997 over Fiji´s delays in constitutional reform.

9. What measures were taken by the EU in the run-up to ACP negotiations, which are starting now, in order to establish a policy dialogue with the ACP countries on these issues?

The EU is continuously seeking a dialogue with the ACP States in respect of observance of human rights and promotion of democratization. The dialogue has become more intensive during the currency of Lomé IV (1990 to 2000).

The resolution adopted on November 28th, 1991, by the Council and the representatives of the Member States on the Council in respect of human rights, democracy and development provided for these topics to be covered in cooperation agreements and suggested both measures for support and sanctions.

As a result, the EU-negotiating guidelines for the midterm review of the Lomé IV Convention 1995 laid down that the principles of democracy and the rule of law should become binding and sanctionable core elements of the Convention. The EU was able to realize this intention after intensive negotiations with the ACP Contracting Parties (new wording of Article 5, inclusion of a suspension clause).

In the run-up to negotiations about the future of Lomé, the European Commission again pointed out in its Green Paper that a successful Euro-

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pean cooperation policy required a more intensive policy dialogue which made it possible to address, without bias, questions such as good governance, democratization, respect of human rights and the rule of law. The EU is at present making use of the various forums of discussion in the three regions of Africa, the Caribbean and the Pacific in order to address these topics in greater depth.

At the 22nd meeting of the ACP-EC Council of Ministers in Luxemburg on April 24th, 1997, both the EU Member States and the ACP States spoke up in favour of extending the policy dialogue and discussed possibilities of conflict prevention and resolution. This topic was also the object of discussions between the EU and the OAU; the Council adopted a Joint Declaration on this issue on June 2nd, 1997.

10. To what extent have environmental projects been promoted so far within the framework of ACP funding?

The environmental sector was comprehensively covered in Articles 33 et seq. under the Lomé IV Convention. Protection of the environment and of natural resources has been incorporated into ACP-EU cooperation as a cross-sectoral remit. In addition, environmental impact assessments are made in line with Article 37 for large-scale projects and projects bearing substantial environmental risks, if required.

11. In what way has the Federal Government ensured coherence between the Lomé Convention and national development policy and harmonized bilateral and multilateral aid in this field?

The Federal Government actively influences the design of EU-development policy vis-a-vis the ACP States through its membership in the relevant Council groups (ACP, Africa, development cooperation) and the EDF-Committee. In addition, there are constant contacts between officials of the European Commission and representatives of the Federal Government in Brussels and Bonn and between the staffs of EU-delegations and embassies on the spot.

12. To what extent have programmes of bilateral development cooperation been made available by the Federal Government to supplement projects and allocations under the Lomé Convention?

According to Article 130 and Chapter 1 of the EC-Treaty, Community policy in the field of development cooperation constitutes a supplementary element to the respective policies by Member States. In order to optimize the complementary nature of programmes, it is necessary to exchange information between Member States and the European Commission in an efficient manner. To this end, the Federal Government has for years made available to the European Commission its basic conceptional documents and the results of government negotiations. Similarly, the European Commission invites Member States to participate in the country programming procedures (country-related strategy papers, national framework programmes) within the framework of agreed procedures. This enables the Federal Government in concrete individual cases to implement national programmes which take into account Community measures under the Lomé Convention.

Moreover, there are regular coordinating meetings in the individual ACP States between EU-delegations and Member States (cf. pilot project "Operational Coordination" which is being implemented in the ACP States of Ivory Coast, Ethiopia and Mozambique, among others).

13. What does the Federal Government think of the introduction of political and economic criteria for the granting of funds within the framework of Lomé cooperation and to what extent is there correspondence with bilateral cooperation in this area?

The Federal Government is in favour of applying development-policy criteria for decisions on funding. The criteria for bilateral cooperation, which were introduced by the Federal Government in 1991, have found general approval in the meantime at the European level as well. In addition to the aspects of human rights, secu-

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rity in legal matters, participation of the people in political decision-making, a market-friendly and socially-oriented economic order, the development-policy criteria of the Federal Government also include the aspect of development orientation by the Government concerned, aimed at promoting efforts on the part of the recipient country. More attention will be paid to this and the question of efficient implementation of joint development projects ("programme performance") in future.

14. In what concrete cases has the instrument of conditionality been used in the last ten years, and how does the Federal Government view its effect in these cases?

A list of States with which the EU suspended development cooperation temporarily or completely because of civil wars and human rights violations is available under the answer to question 5.

In the event of neglect of human rights, of democratic principles and the rule of law, the Lomé IV Convention, which was amended in the course of the midterm review in 1995 and has still to be ratified, now offers the possibility of entering into consultations with the Contracting Party concerned and of suspending the Convention either temporarily or completely (Article 366a).

The Federal Government strongly supported the inclusion of Article 366a and attributes great importance to this provision for the future. It is aware of the tension between conditionality and partnership-based cooperation.

15. How does the Federal Government view efforts made so far in respect of extending the dialogue in the fields of human rights, participation and democratization?

The EU has been strongly committed to the question of observance of human rights and achieved a substantial success with the amendment of the Lomé IV Convention at midterm (cf. question 9). Respect of the rule of law and democratic principles, as "essential elements" of the Convention, were defined as a basis of cooperation with the ACP States. At the same time, the EU backed up its political commitment with concrete action: it promotes democratization measures by assisting, for example, in elections, or suspends cooperation in the event of serious violations of human rights or democratic principles, if required. At present, development cooperation is suspended temporarily or completely with twelve ACP States; its resumption depends on compliance with a number of criteria (human rights, rule of law).

The ACP States are aware of the fact that the EU attributes great importance to the observance of human rights and fundamental democratic principles. Recent political developments especially in Africa demonstrate, however, that lasting progress is possible only as a result of long-term, intensive cooperation, not excluding short-term set-backs. These problems must be addressed in greater depth in the negotiations about the future of Lomé by means of a partnership-based dialogue.

It is of special importance to the EU in this context to bring about a consensual response to questions such as appraising the human rights situation in the ACP States, applying the suspension clause or resuming development cooperation after suspension on the part of the EU or individual Member States. To speak with one voice in these questions is a prerequisite for a coherent and thus convincing policy towards cooperation with the ACP States.

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II. Instruments of the Lomé-policy

16. How does the Federal Government view the present practice of the STABEX system under the Lomé Convention in respect of the following aspects:

  • continuous economic development of the ACP States,

  • use of the STABEX transfer in the sectors concerned,

  • investment for diversification in the agricultural sector,

  • regional development of agricultural production,

  • expanding ACP exports?

The original aim of STABEX – to stabilize export earnings of the ACP States and to guarantee continuous economic development – has been achieved in parts only. The reason for this is that, owing to a steep fall in prices for major export products of the ACP States (in particular coffee and cocoa), the cover ratio for deficiencies in export earnings was in parts very low: 39% in 1990, 41% in 1991, 43.2% in 1992, 60.24% in 1993. In 1994 transfer claims could be covered completely once again. Similar problems had already emerged in the 80s (in 1980/81 and from 1987 onwards the funds did not suffice to cover all claims). To increase the STABEX funds was out of the question. This would have far exceeded the financial resources of the EDF and additionally have further aggravated imbalances in the allocation of funds since only a few ACP States profit from STABEX funds, for which roughly 14% of EDF allocations have been and still are available.

The use of STABEX funds in sectors affected by fluctuating earnings has serious setbacks because it cements supply-side structures and diminishes the pressure to lower costs and to rationalize.

It is true that for several years now these funds have hardly been used to compensate producers rapidly for lost earnings – as was originally intended –, but in parts used to support structural adjustment programmes and thus diversification in the agricultural sector. This is generally to be welcomed because it provides for greater flexibility and therefore less intervention in market mechanisms. It has, however, brought about a conflict in objectives between the original intention of rapid compensation for lost earnings and the necessity of adapting the use of funds to national development strategies. This is why the STABEX system should not be continued in its present form. Instead, we should discuss whether existing structural adjustment facilities can be extended.

17. In the light of experience gained so far, how does the Federal Government view the fact that the STABEX system does not change existing market conditions?

In the view of the Federal Government it is a serious disadvantage to preserve the supply-side structure which is supported by the STABEX system. The system interferes with market mechanisms and thus reduces the pressure to diversify and to lower costs. Moreover, the STABEX system does not contribute to building up additional processing stages because payments are made only for agricultural raw materials and semi-finished products, not for processed products. Therefore the STABEX system does more to upset the objective of building up competitive export sectors in the ACP States and of reducing dependence on exports of raw materials than to support it.

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18. How does the Federal Government view the STABEX system in the light of tendencies towards lower raw material prices?

In the event of a lasting steep fall in the price of important raw materials, STABEX funds will not suffice to compensate for lost export earnings. This was clearly demonstrated by experience in the years 1987 to 1993 (cf. in this context answer to question 16). This was not, however, the purpose of the STABEX system which was designed to compensate for short-term fluctuations in the prices of raw materials and lower earnings due to supply-side conditions (e.g. caused by crop failure). A lasting decline in the price of specific products indicates a structural excess supply and should result in rationalization and diversification. The STABEX system is counter-productive in this respect since compensation payments reduce the pressure to adapt and thus delay the necessary processes of adaptation.

19. How do the ACP States view the STABEX system in respect of the objectives laid down in the Convention and its underlying procedures?

The Federal Government is not aware of any official assessment of the STABEX system by the ACP States. The ACP States have not adopted an official position about the future of the Lomé Convention either. It is expected for November this year. Statements made by individual representatives of the ACP States indicate, however, that in principle they wish to preserve the STABEX system. In the nature of things, this applies in particular to those States which have profited from the compensation system in the past. The complex procedures and the relatively long time-lapse before actual payments are made have been criticized in individual cases. The Commission is endeavouring to speed up procedures. But in order to guarantee the proper use of funds, agreement must be reached about how funds will be used in the context of the development strategy of the respective country before they are actually transferred ("framework of mutual obligations" in line with Article 210 of the Lomé IV Convention). As a result, some delay in providing the funds is unavoidable.

20. Is the Federal Government aware of cases in which an ACP country did not apply for STABEX funds even though it met the conditions, and what were the reasons for this?

The Federal Government is not aware of any cases in which an ACP country did not apply for STABEX funds even though it met the conditions.

21. What payments were made under the STABEX system in individual years?

The following payments were made under the STABEX system so far:

Lomé I

1975 to 1980

377.5 m. ECU

Lomé II

1980 to 1985

659.5 m. ECU

Lomé III

1985 to 1990

1,374.3 m. ECU

Lomé IV
1st Financial Protocol

1990 to 1995

1,629.3 m. ECU

of which


483.6 m. ECU
392.7 m. ECU
330 m. ECU
285 m. ECU
138 m. ECU

2nd Financial Protocol

1995 to 2000


76.2 m. ECU*

* (Advance financing was provided under the 1st Financial Protocol since the 2nd Financial Protocol is not yet in force)

22. What was the structure of payments made so far under the STABEX system (please break down into countries and products) and what are the implications of this for the future development of the system?

The overwhelming majority of STABEX transfer payments have for years been made for two products: coffee received between 35 and 60% of payments on average (1993: 61.4%) and co-

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coa roughly 15% on average (1993: 18.7%). Some 14 countries profited from payments for coffee in varying degrees over the years: Kenya, Uganda, Tanzania, Madagascar, Sierra Leone, Ivory Coast, Togo, Cameroon, Central Africa, Rwanda, Burundi, Ethiopia, Haiti and Papua New Guinea. Some ten countries profited from payments for cocoa in varying degrees: Sierra Leone, Ivory Coast, Ghana, Togo, Cameroon, Equatorial Africa, Haiti, Grenada, Papua New Guinea and Solomon Is. As far as the other products are concerned, peanuts and cotton were ranking third and fourth among supported products all through the 80s. This situation changed for the first time in the application year 1994 after raw material prices for coffee and cocoa had become more stable: the largest amounts of transfers were granted for bananas (42.6%) and cotton (21.4%), while only 16.4% were paid for coffee and 8.8% for cocoa.

Some few countries profited disproportionately from STABEX payments. This applies, for example, to Ivory Coast which received payments for both coffee and cocoa and therefore ranked first on the list of recipient countries for years. This imbalance in fund allocation independent of needs and level of development, apart from the negative impact on market mechanisms, is another reason why the Federal Government supports the termination of the STABEX system in its present form.

Tables of countries and products for which STABEX payments were made in the last years have been appended.

23. What payments have been made under the STABEX system for emergency relief and reconstruction measures in the case of natural disasters (please break down into countries and events) and how should they be evaluated?

Under the Lomé IV Convention the following countries mainly received STABEX payments for reconstruction measures after natural disasters:

  • Western Samoa in 1991 for cocoa, copra products and oilcake after 80 to 90% of the plantations were destroyed by cyclones VAL and OFA;

  • St Lucia in 1992 and 1993 for bananas after destruction caused by tropical storm Debbie;

  • St Lucia in 1995 for bananas after destruction caused by hurricane Luis;

  • St Vincent and The Grenadines in 1993 for bananas because of decline in exports due to a period of drought.

In the event of natural disasters, the ACP States concerned will receive payments from both the Fund for Emergency Measures and from the STABEX fund, if its conditions are met. Funds for humanitarian aid can additionally be made available by the European Community Humanitarian Office (ECHO). This leads to intransparency in respect of the size of payments made in a given case. To tie STABEX transfers to the previous level of exports of specific products to the EU seems to be arbitrary in case of a decline in export earnings due to natural disasters. This is why STABEX funds should not be used in these cases. By regionalizing ACP-EU cooperation, the problem of natural disasters – in particular cyclones in the Caribbean and the Pacific – could be separately taken into account under the regional agreements with the Caribbean and Pacific countries within the framework of regulations for emergency relief and reconstruction measures.

24. Does the Federal Government have any knowledge of cases where STABEX funds were not used as stipulated in the Convention as a result of corruption?

The Federal Government does not know of any cases in which STABEX funds were not used as stipulated in the Convention because of corruption. Implementation and control of the STABEX system is the responsibility of the European Commission. It submits annual reports about the implementation of STABEX to the Member States. Additionally, the European Court of Auditors drew up a "Special Report on the STABEX system under the First Financial Protocol of the Fourth Convention of Lomé" in

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1995 (special report 2/95, ABl. No C167 of July 3rd, 1995). These reports did not indicate any cases of corruption. It is true that the Court of Auditors criticized the cumbersome nature of procedures, but it also emphasized that it had become easier to control the use of funds as a result of the "Framework of Mutual Obligations" introduced under Lomé IV.

25. What experience has been gained so far in implementing the STABEX system in respect of efficient evaluation and what improvements does the Federal Government regard as necessary?

The Commission regularly evaluates the use of STABEX in the individual ACP States. At present, the STABEX system is being systematically evaluated within the framework of a comprehensive evaluation of ACP-EU development cooperation. The final report is expected to be presented in spring 1998. No comment can therefore be made about results of the ongoing evaluation processes.

26. How does the Federal Government view the SYSMIN system for the rehabilitation of mining companies?

The SYSMIN system for funding projects and programmes for the rehabilitation of mining companies has been used very little. At the end of 1996 some 60% of the funds under the 7th EDF (duration 1990 to 1995) only had been allocated. The SYSMIN system was in principle established in order to compensate ACP countries with mining activities who would not profit from the STABEX sytem, or profit only to a limited degree. This has produced new imbalances in the allocation of funds, however, because SYSMIN receives almost 5% of EDF-payments (under the 7th EDF 480 m. ECU), from which only roughly 13 ACP States are profiting.

In view of slow retrieval of funds and one-sided preferential treatment for ACP States with mining activities, the SYSMIN system should be discontinued and specific problems of these States be considered in the national framework programmes which can be adapted to the needs in a flexible manner.

27. How do the ACP States view the SYSMIN system?

The Federal Government is not in possession of any official evaluation of the SYSMIN system by ACP States.

28. What payments have been annually made under the SYSMIN system in individual years and what countries have received SYSMIN funds and what amounts?

The following funding decisions have so far been taken under Lomé II to Lomé IV:


ACP State

– in m. ECU –

Lomé II
(1980 to 1985)

Zambia I
Zambia II
Zaire I
Zaire II


Lomé III
(1985 to 1990)

Guinea (Conakry)
Papua New Guinea


Lomé IV
1st Financial Protocol
(1990 to 1995)

Dominican Republic
Burkina Faso


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29. How does the Federal Government view the possibility of using SYSMIN for the rehabilitation of mining companies in respect of product diversification in the ACP States?

The SYSMIN system is primarily intended to improve the competitiveness of mining companies. If it is not possible to preserve or restore the viability of the company, the funds may be used for projects and programmes in other sectors as well. SYSMIN funds also contribute to the diversification of economic structures in this respect. However, funds have so far largely been used directly in the mining sector. The SYSMIN system therefore does not constitute an instrument which contributes significantly to diversification. Comparable projects can also be supported with funds from national framework programmes.

30. How does the Federal Government view the Centre for Industrial Development (CID), aimed at supporting the private sector in the ACP States, in respect of increasing the production of goods of higher added value for domestic needs of the ACP States and for export?

The Centre for Industrial Development offers support in identifying potential industrial projects in the ACP States and partnerships (joint ventures) between ACP and EU enterprises; it advises in the setting-up of financing schemes and draws up feasibility studies for industrial projects. In order to concentrate more strongly and efficiently the activities of the CID, it was decided in the course of the midterm review of the Lomé IV Convention to concentrate the activities of the CID on those States which have identified support of industrial development or the private sector in their national framework programmes or which have already received financial aid and support for this purpose from other institutions of the Community.

The CID supports efforts on the part of the ACP States to diversify their economies and thus to reduce their one-sided dependence on raw materials by increasing production of goods of higher added value.

However, its parity-based structure and relatively large number of bodies have repeatedly resulted in control and management problems within the CID and its supervisory bodies. As a result, more than 50% of the funds of the CID have so far been used as a rule for personnel and administrative costs. It is therefore the view of the Federal Government that a reform of the CID and its structures is necessary. The results of the ongoing comprehensive evaluation of the CID will have to be taken into account in this reform.

31. How does the Federal Government view the fact that the CID concentrates its consultancy on companies with an investment volume of more than 1 m. ECU (excluding micro-enterprises and SMEs)?

In line with Article 89 of the Lomé IV Convention, the CID primarily handles the promotion of companies planning small and medium-sized industrial projects. For internal use, the CID has set a minimum limit of 200 000 ECU and a maximum ceiling of 10 m. ECU total investment volume or all existing assets (in the case of existing companies). However, the lower limit is handled flexibly. In the case of pilot projects or industrial sectors which have been identified as priority areas, smaller projects may also receive support. According to its own data, the CID supports to 80% projects below 1.5 m. ECU, of which 30% were below 500,000 ECU in 1995. It is therefore not correct to say that small and medium-sized enterprises (SMEs) are excluded from support; on the contrary, they are a focal point in the activities of the CID. No support is given, however, to micro-enterprises because the CID lacks the necessary set of instruments to handle such activities. The CID does not employ a network of field staff, but hires international consultancy firms on a case-to-case basis. This makes sense only if given a certain size, and thus excludes micro-enterprises. As a rule, joint ventures cannot be arranged for micro-enterprises either because there are no in-

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terested parties. The CID depends on the market or on demand in this respect.

32. Does the CID´s and the European Investment Bank´s (EIB) orientation towards larger investment volumes lead to concentration of investment consultancy in countries which are more highly-developed anyway, and what conclusions should be drawn from this?

As was already implied in the answer to the previous question, the activities of the CID are not targeted on larger investment volumes, but concentrate on the promotion of small and medium-sized enterprises. There is therefore no reason to talk of concentration on more highly-developed States. On the contrary, the annual report of the CID for 1995 indicates that a great number of projects were also developed in countries which belong to the least developed countries (LLDCs), such as Guinea, Guinea-Bissau, Mali, Mauritania, Chad, Togo, Ethiopia, Madagascar, Zambia and Angola. Promotion of the private sector by the CID does not depend therefore on the level of development of individual countries, but on the development orientation of individual Governments: as was already stated in the answer to question 30, the CID is meant to concentrate its activities on those States which have identified promotion of the private sector as a priority in their own development strategy.

33. What payments have been made in individual years within the framework of the Centre for Industrial Development?

The following funds were available to the CID under the individual Lomé Conventions:

Lomé I

1975 to 1980

9 m. ECU

Lomé II

1980 to 1985

25 m. ECU

Lomé III

1985 to 1990

40 m. ECU

Lomé IV

1st Financial Protocol

1990 to 1995

60 m. ECU

2nd Financial Protocol

1995 to 2000

73 m. ECU

Consequently, there were on average some 12 m. ECU per year available under the 1st Financial Protocol of the Lomé IV Convention, of which almost 50% were used for interventions in the ACP States.

34. How do the ACP States view the Centre for Industrial Development?

The Federal Government is not aware of any official evaluation of the CID by ACP States. As was mentioned already (cf. question 19), no official position of the ACP countries on the future of the Lomé Convention is as yet available. Statements by individual representatives of the ACP States imply that they view the CID in a positive light and wish to preserve the institution.

35. How does the Federal Government view the consultancy activities of the Technical Centre for Agriculture (TCA) in respect of a lasting increase in food production, considering especially secure food supplies, demographic growth and environmental protection?

The TCA has a great deal of diverse experience in the organization of international meetings and seminars and in publications on current problems of secure food supplies, agricultural production, rural development and the protection of the environment and of resources. To disseminate this specialized know-how can contribute to a lasting increase in food production in developing countries in the medium and long term.

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III. Future Lomé cooperation

36. What are the objectives of the Federal Government in continuing the Lomé-process?

The Federal Government holds the view that a new Lomé Convention should address more intensively the different regional interests of developing countries and their differences in development. The policy dialogue with the ACP States should be extended and intensified on this basis. In the context of trade policy, it is the aim of the Federal Government to design the Lomé Convention in a way which makes it conformable with GATT.

37. What concrete steps does the Federal Government regard as indispensable for continuing the Lomé Convention and how does it intend to incorporate them into the negotiations?

The Federal Government holds the view that future relations with the ACP States should be based on the following principles:

  • regionalizing the Lomé Convention by breaking up the Convention into three regional agreements with the African, Caribbean and Pacific countries, respectively, which could be linked by a basic agreement, if required. The basic agreement may cover areas of cooperation which should be regulated along the same lines for all ACP States;

  • creating WTO/GATT-conformity of the present trade regulation under the Lomé Convention by concluding regional free-trade agreements, with exception clauses for the least developed States (LLDCs), if required;

  • linking financial aid more strongly to compliance with the conditions of good governance, recipient countries´ own efforts and their willingness to implement reforms;

  • taking into account the objectives of sustainable development and especially an improvement of environmental standards, where required;

  • discontinuing the financing systems STABEX and SYSMIN because they favour disproportionately a specific group of countries and are questionable in the context of development policy;

  • creating suitable general conditions for investments by drawing up regulations on freedom in the establishment of enterprises;

  • continuing to fund the EDF from national budgets.

The negotiating concept of the EU is drawn up in the Council Group "ACP" (see question 3). The Federal Government will incorporate its views into these internal EU-negotiations.

38. How does the Federal Government intend to ensure coherence between European development cooperation and its environmental, agricultural, economic, foreign and foreign trade, development and monetary policies?

In formulating the respective policies the other policy areas involved are taken into account. If measures are not coherent in individual cases, the Federal Government will do all it can, also on a European level, to remedy the situation.

Since 1993 the precept of coherence has been included under Article 130 of the EC-Treaty. In order to strengthen coherence at a European level, the Federal Government, in conjunction with the Netherlands, exerted decisive influence on the coherence resolution of the Council of Ministers of June 5th, 1997. This resolution in principle proposes that the Council of Ministers

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request the Commission to place particular emphasis on problems of coherence in respect of development cooperation and to submit a regular report on questions of coherence in the field of development cooperation to the Council.

39. In continuing the Lomé-approach, does the Federal Government intend to pursue a global structural policy, and if so, how does it intend to implement it?

As stated already in the answer to question 1, the guiding concept of the Lomé Convention is autonomous economic and social development, based on independent decisions and programmes of the ACP States. Influence on economic policy by the EU is possible only indirectly within the framework of the dialogue with ACP States on drawing up national framework programmes and projects. According to the Lomé Convention, the ACP States recognize that introducing market-economic principles and a private-sector economy is of great importance for economic development.

40. What kind of positive incentives for trade with ACP States are regarded as necessary by the Federal Government?

It is the aim of the Federal Government to conclude GATT-conformable regional free-trade agreements which are intended to reduce customs tariffs and quantitative restrictions for all major areas of trade. The EU has already completed its part for the industrial sector. While taking into account the given situation in agricultural policy, the planned agreements are also intended to lead to a more open market in the agricultural field – maintaining, however, protective measures for a limited area, e.g. for sensitive agricultural products, in line with obligations under Article XXIV GATT.

41. How does the Federal Government intend to harmonize the Lomé-approach with the agreements of WTO?

As already stated in the answer to question 40, GATT-conformable free-trade agreements or agreements for establishing a free trade zone should be concluded with individual regional groups of countries. An exception clause may be introduced for the least developed States, if required.

42. What conflicts in objectives will arise for ACP States as a result of the new WTO-regulation in pursuing the objective of sustainable development?

It is the view of the Federal Government that the objectives of sustainable development, including environmental objectives, should also profit from further trade liberalization in the cooperation with ACP States.

A GATT-conformable free-trade regulation requires a reduction of customs tariffs and quantitative restrictions on the part of the ACP States as well. A transitional phase of ten years is provided in the case of an agreement for the establishment of a free trade zone. Moreover, protective regulations continue to be permissible for certain, particularly sensitive products. Consequently, the developing countries have sufficient time to adapt their import regulations in such a way that products to be protected can survive in competition or to exclude individual products from liberalization. Competition itself may in turn contribute to sustainable development, for example as a result of faster modernization of production plants. Conflicting objectives should not arise if regulations for transition and exceptions are handled properly.

In the final analysis, development cooperation is to enable ACP States, among other things, to make use of the opportunities resulting from import liberalization by strengthening the national supply capacity of these States, and to minimize the risks of import liberalization. The question of how the least developed countries could profit from the WTO-regulations will also be the object of the High-level LLDC Conference of WTO and UNCTAD in Geneva at the end of October 1997.

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43. What transitional arrangement does the Federal Government regard as necessary in harmonizing the Lomé and WTO-approaches in order not to hinder autonomous development on the part of the ACP States?

The aim is to conclude agreements for the establishment of regional free-trade zones which are permissible under Article XXIV, Sect. 5 GATT, provided the agreements spell out more concretely the commitment to reduce customs tariffs and quantitative restrictions. The time allowed for establishing the free-trade zones is ten years according to sub-section 3 of the agreement for the interpretation of Article XXIV, Sect. 5 GATT of 1994. An extension of this time is allowed in exceptional cases. This gives ACP States sufficient time to adapt their economies to the new conditions of competition. Particularly sensitive products can be excluded from market liberalization.

It is to be expected that the least developed countries (LLDCs) will not be in a position economically to reduce customs tariffs and quantitative restrictions on their part within the ten years allowed under GATT. In this case a longer timeframe could be envisaged for which an exception permit may be required under Article XXV GATT. It is also conceivable to regulate trade relations with these States on the basis of the General Preferential System (GPS) for developing countries. According to the conclusions of the Council of June 2nd, 1997 in respect of market access for the least developed countries, the GPS for LLDCs is to be amended as early as January 1st, 1998, in a way to guarantee equality of treatment of all LLDCs with the ACP States so that the present level of preferential treatment of ACP States could also be maintained on the basis of the GPS.

44. To what extent have German implementation agencies (Agency for Technical Cooperation GTZ and Reconstruction Loan Corporation KfW) and German NGOs been involved in programmes within the framework of the ACP Agreement so far and how does the Federal Government view the coordination between these activities and bilateral programmes of the EU-States?

a) In addition to technical cooperation on behalf of the Federal Government, GTZ implements projects and programmes commissioned by international and supranational clients, the European Commission among them. In the course of these activities, GTZ receives information about the above-mentioned projects and programmes through international tenders. GTZ thus ensures that an intended project does not conflict with the principles of German development policy.

In 1996, GTZ was awarded 40 contracts by the European Commission with a total volume of 51,253,779 DM, of which nine with a volume of 27,978,386 DM, i.e. more than half, by the EDF. During the 1st quarter of 1997, ten contracts with a volume of 10,858,114 DM were awarded to GTZ, two of which with a volume of 5,015,212 DM were awarded by the EDF.

b) KfW is providing co-financing at present in the area of EU/EDF with 13 planned projects in ACP States. The total investment volume of these planned projects amounts to 2.1 bill. DM, of which 377 m. DM are financed on the basis of Financial Cooperation (FC) and 292 m. DM by EU/EDF-funds. KfW draws up statements on behalf of the Federal Government on financing proposals of the EDF and EIB, provided country, sector, project or concept-specific knowledge is available about these proposals. Country-related strategy papers and framework programmes play a particularly important part for the ACP States because this is where focal areas of work and objectives are defined and negotiated which are important also for FC-programming because of the substantial volume of EU-funds involved.

c) Under the ACP Convention NGOs are almost exclusively involved in humanitarian aid programmes implemented by ECHO.

Participation of NGOs is also feasible in decentralized cooperation. No experience is as yet available in this field since it is a relatively new option within the framework of Lomé-cooperation.

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NGO-based co-financing for planned projects of development cooperation is additionally possible by using various budgetary channels of the Community budget.

d) The Federal Government has implementation agencies, experienced in development cooperation, at its disposal (in particular GTZ and KfW) and maintains close contacts to the NGOs. Coordination of activities of the above-mentioned institutions with bilateral German programmes is thus taking place.

45. How is the principle of budgetary clarity to be ensured in future, and from what budget should funds be made available for the ACP States?

Is it the intention of the Federal Government to transfer future EDF-funds to the Community budget?

The Member States of the EU incorporated the following declaration about the EDF into the Final Act of Maastricht: "The Conference agrees that the European Development Fund will continue to be financed by national contributions in accordance with the current provisions."

The Federal Government does not see any reason to deviate from this declaration. Funding from Community budget would lead to a significantly higher financial burden for the Federal Republic of Germany. In terms of the 8th EDF (volume: 12,967 bill. ECU, of which 12,840 bill. ECU new funds), the Federal Republic of Germany would have to contribute instead of 23.36% (= 3 bill. ECU) some 30% (= 3.85 bill. ECU). This would mean an additional 85 bill. ECU (some 1.7 bill. DM). Besides, the contribution quotas can be adapted every five years independent of established criteria, thus taking into account in a flexible manner the respective political interests of paying countries. Funding from national budgets additionally guarantees more control by national Parliaments.

The principle of budgetary clarity is recognized by including the annual planned allocations of the European Development Fund into the overall budget of the Community, even though they are not determined on the basis of the procedure applied to the Community budget as a whole.

In respect of content, the aim is to prevent, as much as possible, funding resources of a similar nature under both the Community budget and the Lomé Convention, in order to avoid duplication of funding.

46. What demands in respect of continuing the Lomé Convention have so far been made by the ACP States vis-a-vis the Federal Government or the EU-Commission, and what does the Federal Government intend to do about such proposals?

The ACP States have not so far adopted any official position regarding the future of the Lomé Convention. A Statement has been announced regarding the Green Paper of the Commission, which is not, however, to be expected before autumn this year. The Dutch EU-Presidency organized an informal ACP-EC Conference of Ministers about the future of the Lomé Convention on April 18th/19th, 1997. A short while later, the same topic was also addressed at the official ACP-EC Council of Ministers in Luxemburg. Inasmuch as individual ACP States expressed their views on these occasions, they spoke up in favour of continuing the Convention in its present form, of improving market access for agricultural products and of maintaining the funding systems STABEX and SYSMIN.

47. How much importance does the Federal Government attach to the gender perspective in cooperation and how does it intend to promote it in the ACP context (rights of participation and decision-making for women, access to productive resources, training of women and girls)?

The Federal Government attaches great importance to equal participation of women and men in cooperation. It continues to support the areas defined unter Article 153 of the Lomé IV Convention and the principles adopted in the reso-

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lution of the Council, and by representatives of the Member States on the Council, in respect of consideration of gender-specific questions in development cooperation of December 20th, 1995 (in particular, to take into account the results of an analysis of rights and obligations of women and men at all levels of conceptualization, planning and implementation of all development policies and programmes and of monitoring and evaluating them). The proposal of the Commission for a Council regulation about consideration of gender-specific questions in development cooperation of June 9th, 1997, which provides for funding of programmes with a gender perspective, finds the support of the Federal Government.

48. What possibilities does the Federal Government perceive of linking the growing regionalization tendencies between developing countries with the ACP approach, and how does it appraise the influence of regional cooperation in terms of successes in development cooperation?

The Lomé IV Convention already provides for the Community to support efforts towards regional cooperation on the part of ACP States (Article 156 et seq.). To this end, in addition to national framework programmes, regional programmes will be drawn up, targeted specifically on promoting regional cooperation. To strengthen regional cooperation has, as a rule, a positive effect on the development of individual States. This applies in particular to the area of trade. It is the view of the Federal Government that regional free-trade agreements of the EU with the ACP States, which in principle do not affect import regulations between the ACP States, should be complemented by more intensive cooperation among the ACP States themselves, as is the aim of, for example, SADC. This could intensify division of labour among these countries and create larger markets. It will additionally contribute to improved export structures of the ACP States. The Federal Government will therefore speak up in favour of inviting the ACP States in a new agreement to conclude free-trade agreements among themselves.

49. How does the Federal Government view the four options proposed in the Green Paper of the European Commission in respect of ACP cooperation with the aim of continuing the Lomé-approach by

  1. a global agreement,

  2. a global agreement, complemented by bilateral agreements,

  3. regional agreements and

  4. a general agreement with Least Developed Countries?

The Federal Government supports more intensive regionalization of Lomé cooperation with the aim of accounting more effectively for differences of interest among the ACP States. This might also lead to better regional cooperation among ACP States themselves. This is why the Federal Government rejects the continuation of the existing global agreement (option a) and supports regional agreements with the African, Caribbean and Pacific groups of countries (option c). These regional agreements may be linked by a general framework agreement, if required (option b). The Commission itself has defined as impracticable a separate agreement with LDCs for all areas except trade. The Federal Government shares this view.

50. What distribution criteria should be applied in the opinion of the Federal Government for a geographical allocation of ACP funds?

As already indicated in the answers to questions 4 and 13, the Federal Government favours the introduction of additional development-policy criteria for the allocation of funds. In the light of challenges faced on the African continent, in particular, this continent will have to receive special attention in future as well.

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51. What importance does the Federal Government attach to the question of participation for the future development of ACP States (inclusion of "civil society", the "private sector", NGOs), how does it intend to strengthen the role of civil society in future and what kind of bilateral concepts is it drawing up itself?

To include into cooperation civil society, the private sector and NGOs is an important condition for the development of ACP States. With the amendment of Lomé IV it is now possible to promote decentralized cooperation (Article 251a to 251e). Decentralized cooperation with developing countries should additionally be backed up by a Council regulation which is being discussed at present. The Federal Government is in favour of enabling the European Commission to also promote NGOs directly in future, in particular if the Government of the ACP State concerned violates principles of cooperation (human rights, good governance).

52. How can the special partnership-based dialogue between the ACP States and the European Union be further expanded in the opinion of the Federal Government?

The Federal Government starts from the assumption that a successful global structural policy for preserving peace and the environment also requires close, partnership-based cooperation with the ACP States. Questions such as crisis prevention, social progress and migration can be discussed only in a dialogue of equal partners. Unlike in the past, developing countries are increasingly recognizing their own responsibility for development.

Within the framework of negotiations about the future of Lomé the following items should therefore be discussed:

  • While recognizing the responsibility of partner countries, the negotations should definitely include crucial questions such as respect of human rights, participation of the people in political decision-making, the rule of law, willingness to introduce reforms and development orientation in Government activities.

  • The political dimension of cooperation should be intensified and expanded by additional items. The aim is to include problems of a more general nature – those that exceed the framework of Lomé, but are of interest to both sides: conflict prevention and resolution, terrorism, different forms of migration, drugs and health or environmental problems.

  • Since the onset of ACP-EU cooperation, a number of central forums have existed which facilitate a regular exchange of views: ACP-EC Council of Ministers, the Committee of Ambassadors, Joint Assembly. These structures should be adapted to the requirements of a more intensive dialogue.

  • For some years, the EU has also been intensifying its relations to regional organizations such as the OAU or SADC. Region-based cooperation makes it possible to differentiate form and content of discussions and thus to operate more efficiently; it should be further expanded.

  • To expand cooperation beyond the framework of EU-institutions offers new possibilities: contacts between the Contracting Partners at all levels of society, i.e. between local governments, associations, universities, research centres etc., add a new dimension to partnership-based dialogue.

53. In what way should the principle of subsidiarity also be applied to the Lomé Convention in the opinion of the Federal Government?

The principle of subsidiarity laid down in Article 3b of the EC-Treaty applies to all areas which do not fall exclusively under the responsibility of the Community, therefore to development cooperation as well. As a result, the principle of subsidiarity impacts also on the ACP-EC Convention.

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The relationship of Member States to the EU will continue to be practised as before, i.e. be based on a division of labour with a view to potential capabilities of action. For example, in many, largely smaller developing countries, it is exclusively the Community which acts as donor, while Member States concentrate on the respective countries of their choice. How to improve coordination further is a topic to be pursued also in the coming negotiations about future cooperation of the EU with the ACP States.

54. How does the Federal Government view the relationship between the environment and development within the framework of future ACP-EU cooperation, and what instruments, institutions and funds for including environmental issues are regarded as suitable by the Federal Government?

The guiding concept of sustainable development has been incorporated into ACP-EU cooperation since UNCED 1992. Future cooperation under the Lomé Convention must also recognize the fact that the environment and development are two inseparably connected dimensions. In the opinion of the Federal Government, the instrument of environmental impact assessments should be further extended in the interest of effectively implementing the principle of sustainable development. This means to make environmental impact assessment compulsory for all projects which have an impact on the environment, not only for those carrying a substantial risk for the environment. Within the framework of the policy dialogue, the EU can further contribute constructively to this by encouraging the Governments of ACP States to build up structures for analyzing, and coping with, environmental problems and by providing the necessary financial support from the EDF. Special attention should be paid in this respect to the topics "protecting the climate", "preserving bio-diversity" and "eliminating desertification" which are covered by the respective UN-Conventions.

55. What possibilities does the Federal Government envisage for decentralizing decisions on programmes in developing countries under the Lomé Convention and how can the use of funds be made more efficient as a result?

A better and more efficient use of funds based on decentralized decision-making powers requires the building-up and extension of functioning decentralized institutions in the ACP State concerned. Progress thus depends on the political will and good governance of the recipient country. Great efforts are being made both at a bilateral and at a European level to shift decision-making powers to local levels because of the particular relevance of this question.

© Friedrich Ebert Stiftung | technical support | net edition fes-library | Mai 2002

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